Gas price pooling: CCEA to take final decision

There is lot of confusion prevailing in different arms of the government on the matter of gas price pooling. The power ministry continues to oppose the proposed gas price hike to about USD 6.7 per mmbtu.

CNBC-TV18’s Siddharth Zarabi learns that the Cabinet Committee on Economic Affairs (CCEA) might take the final decision on the gas price hike. Earlier, the oil ministry had moved a separate proposal for hiking the price of gas sold in India, the power ministry had moved the Cabinet Committee on Investment (CCI) seeking a diversion of almost 18 million standard cubic meters per day of gas from non core sectors, which the power ministry describes as steel, chemicals among others to the power sector. However, the Prime Minister’s Office (PMO) has shot down the power ministry's move to approach the Cabinet Committee on Investment (CCI), and has now decided that this matter cannot be taken up by the CCI, which is a recently created body for resolving investment bottlenecks. The matter will go to the Cabinet Committee of Economic Affairs (CCEA). More importantly, the oil ministry has separately moved empowered group of ministers (EGoM), saying that the priority list of allocation for gas which has been in place for many years now - where the government decides which sector stands in the priority ranking, that should be abolished. There should be a system where there is a different kind of availability of gas for front ranking sectors. The ministries of the two very crucial sectors of the economy that is power and oil have not seen eye-to-eye on a lot of matters for many years. Hence, the PMO have moved to try and end this difference of opinion between the two ministries.  The PMO is trying to at least ensure that the same committees will discuss other gas matters including price matters, and will also look at the principle of price pooling. Also read: Will not bow to any threat; gas prices will be hiked: Moily This tells us confusion that prevails because all that was needed was that gas price and gas allocations be seen by the same group and be decided on a quick basis.